Labour was re-elected in the 1987 election with its parliamentary majority untouched, but the internal disputes continued. Eventually Lange forced Douglas to resign in December 1988, but the crisis had weakened Lange's position such that he resigned eight months later. He was replaced as Prime Minister by Geoffrey Palmer, but Palmer failed to revive Labour's falling popularity. Several months before the election, Palmer was replaced by Mike Moore. The National Party was performing strongly — its leader, Jim Bolger, spoke repeatedly of "the Decent Society", saying that the reforms were doing significant damage to the social fabric of the country. The government was also being challenged by the NewLabour Party, founded by renegade MP Jim Anderton.

The date for the 1990 election was 27 October. 2,202,157 people were registered to vote, and 85.2% of these people turned out. The number of seats being contested was 97 — this was the same as in the previous election, which had the largest number of seats for any Parliament until that point.

The governing Labour Party, by contrast, suffered its worst-ever electoral defeat since it first won power in the 1935 election, winning only 29 (30%) of the seats and 35% of the vote (its lowest percentage since 1931), and losing 27 seats. Initially it appeared that twelve ministers and the Speaker had lost their seats, but Fran Wilde scraped in on special votes. Many of Labour's talented "class of 84" were sent away, though four of them, Annette King, Jim Sutton, Trevor Mallard and Judy Keall, returned in 1993.[2]

The result was primarily due to intense anger at Labour and its policies (shown by it losing 12% of its vote) rather than love of National (which only increased its vote by 4%).

McLeay, E. M., ed. (1991). The 1990 General Election, Perspectives on Political Change in New Zealand: Occasional Publications No 3, Department of Political Science. Wellington: Victoria University of Wellington. ISBN0-475-11202-4.

Stringer, John (1990). 1990 Parliamentary Candidates for the New Zealand National Party. Wellington: New Zealand National Party.

Vowles, Jack; Aimer, Peter (1993). Voters' Vengeance: The 1990 Election in New Zealand and the fate of the Fourth Labour Government. Auckland: University Press. ISBN1-86940-078-X.